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Journal entries and trial balance

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3-15: Compute the missing amounts for companies A, B, and C.

A B C
Cash . . . . . . . . . . . . . . . $45,000 $ 4,500 $18,000
Accounts receivable . . . . . . . . 10,000 10,000 14,000
Land and buildings . . . . . . . 75,000 ? 50,000
Accounts payable . . . . . . . . . . ? 12,000 28,000
Mortgage payable . . . . . . . . . 60,000 17,000 22,000
Owners' equity . . . .. . . . . . . 45,000 15,000

3-16: From the information provided, determine:
1. The amount of retained earnings at December 31.
2. The amount of revenues for the period.
Totals January 1 December 31
Current assets . . . . . . . . . . . . . . $ 10,000 $ 15,000
All other assets . . . . . . . . . . . . . . 190,000 180,000
Liabilities . . . . . . . . . . . . . . . . . 65,000 45,000
Capital stock . . . . . . . . . . . . . . . . 60,000 ?
Retained earnings . . . . . . . . . . . . . . 75,000 ?
Additional data:
Expenses for the period were $75,000.
Dividends paid were $11,500.
Capital stock increased by $10,000 during the period.

3-17: Make the journal entries necessary to record the following eight transactions.
a. Purchased inventory on account for $130,000.
b. Sold goods for $100,000 cash. The goods originally cost $65,000.
c. Paid $27,000 cash for employee wages.
d. Paid $12,500 cash for advertising.
e. Sold goods for $25,000 cash and $60,000 on account (a total of $85,000). The goods originally cost $57,000.
f. Collected cash of $47,000 from the $60,000 receivable on account; the remaining $13,000 is expected to be collected later.
g. Paid cash of $55,000 on the $130,000 payable on account; the remaining $75,000 is expected to be paid later.
h. Paid cash dividends of $8,500.

3-18: Refer to the journal entries made in Practice 3-17. Construct a T-account representing each account impacted by those eight transactions. Post all of the journal entries to these T-accounts. Compute the ending balance in each account. Assume that the beginning balance in each T account is zero.

3-19: Refer to the T-accounts constructed in Practice 3-17 and Practice 3-18. Using the ending balances in those T-accounts, construct a trial balance. Note: The only account that is common to these two sets of T-accounts is the cash account; add the two cash account balances together to get the total balance.

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Solution Preview

3-15: Compute the missing amounts for companies A, B, and C.
A B C
Cash . . . . . . . . . . . . . . . $45,000 $ 4,500 $18,000
Accounts receivable . . . . . . . . 10,000 10,000 14,000
Land and buildings . . . . . . . 75,000 ? 50,000
Accounts payable . . . . . . . . . . ? 12,000 28,000
Mortgage payable . . . . . . . . . 60,000 17,000 22,000
Owners' equity . . . .. . . . . . . 45,000 15,000 ?

Normally, total assets equal to total liabilities plus total equity. Therefore, we can find the missing amounts by using the following equation.

Total assets = Total Liabilities + Total Equity
Cash + Accounts receivable + Land and buildings = Accounts payable + Mortgage payable + Owners' equity

Company A
45,000 + 10,000 + 75,000 = Accounts payable + 60,000 + 45,000
130,000 = Accounts payable + 105,000
Accounts payable = 25,000

Company B
4,500 + 10,000 + Land and buildings = 12,000 + 17,000 + ...

Solution Summary

This solution is comprised of a detailed explanation to find the missing amount, prepare the journal entries and trial balance for the given accounting transactions.

$2.19
See Also This Related BrainMass Solution

Financial Accounting - Journal Entries, Trial Balance, Income Statement and Retained Earnings

*P2-6A Global Graphics Company was organized on January 1, 2002. At the end of the first
6 months of operations, the trial balance contained the following accounts.

Debits Credits
Cash $ 9,500 Notes Payable $ 17,000
Accounts Receivable 14,000 Accounts Payable 9,000
Equipment 45,000 Common Stock 25,000
Insurance Expense 1,800 Graphic Revenue 52,100
Salaries Expense 30,000 Consulting Revenue 6,000
Supplies Expense 3,700
Advertising Expense 1,900
Rent Expense 1,500
Utilities Expense 1,700
$109,100 $109,100

Analysis reveals the following additional data.
1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June
30, $1,300 of supplies was on hand.
2. The note payable was issued on February 1. It is a 12%, 6-month note.
3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1,
2002.
4. Consulting fees are credited to revenue when received. At June 30, consulting fees of $1,100
are unearned.
5. Graphic revenue earned but unbilled at June 30 totals $2,000.
6. Depreciation is $2,000 per year.

Instructions
(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)
(b) Prepare an adjusted trial balance.
(c) Prepare an income statement and a retained earnings statement for the 6 months ended June 30 and a balance sheet at June 30.

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